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HQ 545949




August 24, 1995

VAL R:C:V 545949 RSD

CATEGORY: VALUATION
District Director
U.S. Customs Service
200 St. Paul Place
28th Floor
Baltimore, Maryland 21202

RE: Application for further review of protest number 1303-94-200073; 19 U.S.C. 1500

Dear Sir:

This is in response to your memorandum dated March 27, 1995, concerning the application for further review of protest 103-94-200073 filed by Customs broker John Connor on behalf of the Ford Motor Company (hereinafter Ford). We regret the delay in responding.

FACTS:

The merchandise involved in this protest consists of machining centers. The merchandise was entered on July 24, 1990, and the entry summary was filed on August 7, 1990. The entry summary indicates the country of origin of the merchandise was Denmark. The entry was liquidated on May 27, 1994. Customs appraised the merchandise based on the prices shown on the foreign seller's invoice submitted with the entry.

Ford protests Customs appraisement of the merchandise based on the declared value as shown on the foreign seller's invoices. It claims that a reconciliation package for this and related entries was being prepared and would be delivered to the import specialist within sixty days to substantiate the claim. The protestant also claims that the merchandise should be classified under subheading 9802.00.80 of the HTS for duty free treatment on the value of any U.S. components returned. The protest file contains a seller's invoice and entry documents, but there is very little other information regarding this protest in the file.

It is your position that the importer has failed to provide any supporting documentation to establish that the prices of the imported merchandise shown on the invoice submitted with the entry summary were inaccurate. Your office made a request for further information, by sending the importer a Customs Form 28 dated August 27, 1990, but the importer did not furnish any additional information to support its claims. Accordingly, the entry summary was liquidated as entered. ISSUE:

Whether the imported merchandise was properly appraised based on the prices shown on the invoices presented at the time of entry?

Whether the imported merchandise should be classified under subheading 9802.00.80 of the HTS for duty free treatment for any U.S. components returned?

LAW AND ANALYSIS

For the purpose of this response, we are assuming that transaction value is the appropriate basis of appraisement. Transaction value is defined in section 401(b)(1) of the Tariff Act of 1930, as amended by the Trade Agreement Act of 1979 (19 U.S.C. 1401a(b); TAA) as the "price actually paid or payable for the merchandise" plus the amounts for the five enumerated statutory additions in 402(b)(1). 19 U.S.C. section 1500 (section 500 of the Tariff Act of 1930 as amended by the TAA ) provides the general authority for Customs to appraise merchandise. With regard to section 500, Statement of Administrative Action provides:

Section 500 allows Customs to consider the best evidence available in appraising merchandise. It allows Customs to consider the contract between the buyer and the seller, if available, when the information contained in the invoice is either deficient or is known to contain inaccurate figures or calculations. Likewise, a contract which has been outdated by subsequent renegotiations prior to exportation would not be considered when an invoice which reflects these renegotiations is presented. Section 500 authorizes the appraising officer to weigh the nature of the evidence before him in appraising the imported merchandise under the constraints of section 402.

In this instance, the importer presented invoices from the seller of the merchandise with the entry summary. No evidence has been presented to demonstrate that the prices shown on the invoices do not accurately reflect the prices actually paid or payable for the imported merchandise. The importer said it would present a reconciliation package for this and related entries to Customs to demonstrate that the seller adjusted the prices for the merchandise, but it did not do so. Furthermore, in this particular instance, the importer was notified by a Customs Form 28, that additional information was needed to establish that the prices for the imported merchandise shown on the seller's invoice were not accurate. However, no response was received to the Customs Form 28. Therefore, the appraising officer had no choice, but to rely on the foreign seller's invoiced prices in appraising the imported merchandise. Similarly, the protestant did not present any evidence to support its claim that the merchandise is entitled to duty free treatment for any U.S. components returned under subheading 9802.00.80 of the HTS. Therefore, it was proper to reject the protestant's claim regarding duty free treatment of any U.S. components returned under chapter 9802.00.80 of the HTS.

Moreover, under Section 174.13(a)(6) Customs Regulations (19 CFR 174.13(a)(6)), protests must set forth distinctly and specifically the justification for the objection. We conclude that the protest is not in compliance with this section because the protestant did not provide any specific justification to show the invoices submitted with the entry were not correct.

HOLDING:

Ford Motor Company has not presented evidence to demonstrate that the appraisement of the imported merchandise based on the seller invoices was incorrect, and the merchandise should be classified under subheading 9802.00.80 of the HTS for the duty free treatment of any U.S. components returned. Accordingly, you are directed to deny the protest. A copy of this decision with the Form 19 should be sent to the protestant. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision, the office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS, and to the public via the Diskette Subscription Service, the Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director

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